Why do most banks not make their own payment systems instead of relying on Visa and Mastercard like American Express does? Chase, BOA, and Citigroup are all much larger than AE.

Question

Why do most banks not make their own payment systems instead of relying on Visa and Mastercard like American Express does? Chase, BOA, and Citigroup are all much larger than AE.

In: 2

Answer 1

Because it’ll take too much money to build the infrastructure now. And while it might seem like these companies have unlimited funds they do not. They have to allocate their money and see where it’s best used. It’s going to be cheaper to use VISA/mastercard and use your money elsewhere.